The textile Empire of the world : China

 
 
The textile’s world in China is now at its peak. China gets most of the clothing global market and exceeds its main rivals from far. Indeed, it is difficult for any country in the world to compete against the giant Chinese industry. The country has all the resources to make thousands of textile factory run in the same time. Millions of workers are working day and night in China to meet the world clothing need. If China used to be pointed at by product quality nicknamed « Made in China », this is no longer the case anymore. Today, quality is also part of various products « Made ​​in China ».
 
Chinese’s success in the textile industry
 
This success, China fully deserved it. Indeed, there are million of Chinese working tireless in this sector. Thanks to the 1.3 billion inhabitant, China has an inexhaustible human resources. As for infrastructure, China is probably one of the best equipped country in the world regarding industrial equipment. Chinese factories enjoy a complete industrial chain, which means that all the garment manufacturing is done within a single plant. Production capacity of Chinese textile factory is impressive and Chinese generally respect the time delivery. This is the reason why most brands and subsidiaries clothing store opt for China to manufacture their product.
 
One of the greatest assets of China is the direct access to garment manufacturing raw materials. Indeed, Chinese factories don’t need to import any material from abroad. China is also ranked in the top 5 largest textile exporters in the world. The country produces almost everything that keep the economy going.
 
The recent offshoring in Southeast Asia
 
The Chinese are more and more greedy when it comes to the world of textiles. While in China, thousands of factories operate day and night to meet the international demand, Chinese manufacturers go beyond their borders to expand their activity. Indeed, many Chinese factories have been relocated in Southeast Asia since few years. The main reason for this outsourcing is mainly related to the production low cost in these countries. For exemple, in Cambodia, the minimum month wage is 60 euros. Chinese manufacturers find more profitable to settle down in Southeast Asia where most of the countries are exempt of tax for products going to Europe.
 
En effet, de nombreuses usines vont devoir fermer leur porte dans les quatre coins du monde, car il est quasiment impossible de proposer des produits à plus bas prix qu’en Chine.
 
China remains unbeatable in the textile world. However, this Chinese domination is not without risk for the global economy. Indeed, many factories from all over the world will have to close down because of the very competitive price that China offer.

 

Why choosing PEO Services over entrepreneurship in China

Professional Employer Organization: a solid alternative to the entrepreneurship

PEO and entrepreneurship status are two solutions in order to try out a new activity in the case of a creation by one entity or person. In the latter case, it is about starting one company to be the leader, the entrepreneur, which is the driving force behind the economic facts. Typically the contractor is engaged in gainful activities and become an entrepreneur. However, especially in a country like China, starting one’s business without accompaniment or portage can be problematic if not potentially fatal to the career plans. Here’s why:

Benefits of PEO Services over entrepreneurship

Professional Employer Organization (PEO) allows firstly to benefit from social protection of the general scheme. The employee usually has focused executive status. The entrepreneurship is itself self-employed and therefore has less advantages.

Then the person who uses the PEO is covered by unemployment insurance. This is a big advantage over entrepreneurship status that does not allow to have this coverage.

Starting with a PEO permit not to worry about the administrative management of the company: no structure to create, no bills to establish, no accounting…Working conditions are almost identical to the employee’s.

In addition, the employee covered by a PEO does not take any risk whatsoever and is covered by professional liability insurance. The entrepreneurship, as a self-employed, has unlimited liability.

Finally, contrary to the entrepreneurship status, the portage is not capped at a certain amount of turnover.

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PEO Services have proved themselves to be a sustainable solution

Now better regulated, PEO services are an attractive alternative for outsourcers as for independent consultants, partly because it offers better guarantees to the parties.
The French Law defined the obligations that a PEO should apply to perform, including:
• Having a financial security designed to secure outsourced people’s money
• Paying to minimum, on a conventional basis, outsourced people at the end of a month of service, no matter if the customer has paid his bill or not,
• Paying salaries of professionals in non-management status only if the PEO was created before June 25th 2008 and at the latest until June 2015, until the social partners agree to the conditions applicable to non-executives.

It is important to note that if these minimum requirements are not met, PEO are then illegal and thereby endanger professionals with both a financial risk and a refusal to compensation by Employment Organization.

The INS solution

INS advises and provides expertise during your establishment process in China. With its experience in outsourcing services, it can manage the definition of the tasks of your employees, and assists in the development of their contract. Its objective is to facilitate the management of your employees.
We offer you to be in your company as a director of human resources at the specified time, depending on your needs and your budget. INS Global Consulting is today one of the best companies in PEO Services, Payroll outsourcing and human resources management for foreign companies in China.

ins GLOBAL consulting team

What distinguishes it from others? A serious organization. Indeed, it has, during his eight years of experience in the contractual environment, developed knowledge and a thorough check of the procedures and deadlines for corporate accounting. Today INS is also very active in various industrial environments and has an extensive network of relationships.
In addition, INS has a particular interest in the trust of its customers and continually works to maintain healthy relationships with them based on trust and transparency. That is why it is committed to keeping its customers regularly informed of all steps of their accounting processes and guide them throughout their project on potentially feasible adjustments to accelerate their business.

More and more companies rely on the expertise of INS Global Consulting. Indeed, thanks to its small structure, it is a very dynamic and responsive company that meets customer requirements.
Unlike most other staff management companies with too vast range of services, INS specializes in specific services it has mastered to perfection.That is why it has an unlimited management capacity, without restriction.Finally, its prices are among the most competitive on the market.

If you want to know more about the performance of INS, please feel free to contact us.

See also:

5 issues businesses have to face in China

relaxing business

Before starting a business in China, you need to learn about all the required formalities to create a company and any possible steps that may be useful later. Different solutions to bring you a carefree successful start are possible to all who wish to undertake a business in China. They are as stated below.

1- Outsourcing of all administrative paperwork

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Thousands of lengthy paperwork should be expected when you move out off your country to work in China and Chinese policy does not facilitate the entry of foreigner firm in its markets. First, some steps to follow for obtaining a work visa as well as a residence permit through tax returns…

Administrative procedures for foreigner companies, or yet worse for unmanned Chinese market, could be a brake for all business activities in China. Rather annoying, it wastes valuable time instead of focusing on the important points of business.It can take more than two-three days a week.

To avoid wasting time in the different administrative paperwork, consulting firm specializing in the Chinese market is best to help you preparing your business in China. You need to have a company which has years of experiences in the field, and is able to accelerate all required steps in a short time (paperwork, taxes, etc.).

2- To assign the accounts of company to a service provider

accounting business

For performing the business of accounts, it requires both archives, and expenditure-returned patterns in accordance with the international standards in different countries such as the origins of company, the origin of the financials and its customers. If we carry out a business outside our own country, figuring out the maximization of the profit, reviewing its accounts in order to make analyse before moving to other spending is key.

However, accounting is not only required but most essential even for a small or newly created company, managing an accounting during the business trips abroad especially between two countries with two different accounting standards is quite tiring. You could make some mistake into your account. Hire an accountant from your country to manage business account in China is a solution, however, it is thrifty in terms of cost compared to Chinese labour value.

Again, it is recommended to hire a service provider to take care of all about accounting without losing the time if you invest a large sum of money abroad. Many accounting offices are in Beijing, Shanghai and Guangzhou which have many years of experiences with foreigner companies in place or new comers could be found, with very affordable services prices.

3- Hiring the best team members

recruiting

Pay attention to recruit in China, it is not difficult to find candidates for the key positions but the only concern that the boss will meet is to find the best profile. Companies planning to set up in china can hire foreigner workers, but there are some positions in the firm according to its business nature are strongly advised to reserve for adequate profiles.

First of all, the culture which Chinese respect more. So, in a business, we have to get a friendly and cost-effective environment. Taking as example the receptionist position in company, hosting Chinese customers is different from the other countries. You should know the languages of business communication, fluent in mandarin or Cantonese depending on the clients. A foreigner who mastered these languages will be an asset to the company because Chinese are grateful to those who interested to their culture.

Important thing to know is a young Chinese does not have the same qualifications as a young European once graduated, therefore it is quite difficult to select between them. Once more, looking for the company which is specialized in recruitment is recommended in order to save time first but at the same time to avoid making mistakes in the selection process. To conclude, as an important investment, hiring the right profile will mean putting together a good and successful team.

4- Opting for co-working space to minimize expenses

office sharing

To work in our own corner with a healthy environment is more pleasant. In China, renting a big office is not required if you wish to get a comfortable workplace. Buildings are designed especially for offices requiring  accessible. They can be found in all cities in China, down town or in periphery, with all kinds of designs (Modern and traditional).

To get our office, no need for annoying steps, you just have to sign the lease and some minutes after you can take your office with all the necessary office supplies inside. Electricity’s bills, water, connection to internet… These are taken of by the Umbrella company for you

Having an individual office would be ideal when a businessman wants to move in China, however, it turns out to be costly in term of time and budget. Since the past decade, the real estate did not stop growing so the desktop sharing system becomes a trend in the country and it is much more effective. Office rental cost and expense are significantly reduced but the conditions are the same as mentioned above. Entrust to a competent company to take good care of your business location on your choice and fit with your dealing.

5- Getting standard contracts

contrat-de-travail-id6861

To avoid some possible misunderstandings while signing a standardized contract when you are trying to engage in a commercial activity in China, for these first steps, you have to be careful to understand it well, and you have the choice between three types of contracts:
• Length contract determined
• Length contract undetermined
• Employment contract expiring once the mission is achieved.

Developing contract with customers is important; however, when you have difficulties to know the real laws that govern the businesses in China, asking for business advices is beneficial.

Once these steps are respected, implementing activities in China becomes easier. But do not take risks if you are new in the market, we have specialists to assist you in your efforts until your business takes off, especially when your project engages a huge start-up fund. Trusting our services and your success is our goal

Further readings

 

Recruitment in China for foreign companies

In China, the recruitment process is very important, as recruiting someone not well fitted to the position could mean work not done properly or work not done at all. The main key to recruiting the right person for the position is knowing what your ideal candidate is for the job with ideal qualities and the like.

Recruitment

Factors in the recruitment process in China

Recruitment agencies

Recruitment agencies in China will take charge in the research, interview, and pre-selection of your potential candidate, after which they’ll submit the candidate profile to you. The moment you decided to hire the candidate, the agency would receive either the same amount of the candidate’s 1 year salary or a single lump of money, depending on the contract agreed upon and signed.

biz-from-website1

Job hunting websites

Another effective tool in hiring potential employees is through the job hunting websites. Job hunting websites allows the job seeker and the employer see both the requirements and the skills of each other to make a more matching partnership in finding the ideal candidate/ideal job of each other.

Recruitment of managers

As the Chinese economy grows, the demand for experienced and skilled managers and professionals arises. Both foreign and local companies compete from the same circle of skilled employees with technical knowledge, required skills and languages, and practical experiences as a leader or manager. These professionals are usually offered very high salaries. Since salaries in China are rising in the recent years, employers should study very well the levels of wages for the same positions in the Chinese market, and what the company’s willing to offer as a competitive compensation.

recruitment china staff

The selection criteria

Be careful with the selection criteria of your candidates to avoid being fooled with expectations, like a Chinese candidate not from mainland China and whom level of Mandarin is not satisfactory, a Chinese or European candidate whose mastery of English is not enough, a Chinese candidate without enough managing experience to expand a business in mainland China, and a high level framework without any references being checked out before hiring.

Wages scale

The range of salaries in most French and European companies in China can go from 5,000RMB for a first professional experience to 50,000RMB for the highly skilled professional. Salaries vary widely according to the practice, the city, the company, sectors, and level of qualifications.

The-Percentage-Of-Money-Lost-During-Prohibition

The common salary ranges of local contract in Beijing and Shanghai are as follows:

  • 3,000 to 15,000 RMB gross for less than 2 years of work experience.
  • 6,000 to 20,000 RMB gross for 2 to 5 years of experience.
  • 10,000 to 30,000 RMB gross for more than 5 years of experience.

Recruitment in China under an umbrella company

umbrella-china

Umbrella companies take care of your company’s administrative offices, including human resources procedures like the hiring of an employee, visa applications, salary, and etc. Usually, the monthly cost of using an umbrella company in China is around 5% with a minimum of $300USD per month. The umbrella companies take care of the visa procedures of the hired employees, especially with all the paperworks. A work permit in China usually costs around $1000USD and takes around 4 to 6 weeks to process on your own.

INS Global Consulting is an umbrella company that has head hunter services, working and resident permit application services, salary sponsorship services, tax declaration services, expense management and financial reporting services, and insurance services offered.

For more information regarding the recruitment in China, go to

Or you can contact Wei Hsu at weihsu@ins-globalconsulting.com.

 

What are the benefits of PEO Services in China?

Doing business in China using PEO Services: Your best choice

When someone wants to start a business in China, he should prepare well his project and this need is linked to a comprehensive study of the country, its culture and modes of economic operation.

Strong economic growth in China attracts every year more foreign companies wishing to conquer the Chinese consumer market. However, they often discover too late that the administrative and legal processes inherent in setting up a business in China are often long and complex. Did you know that the average time to create even just a representative office in China is between 4 and 6 months? As for the creation of a WFOE (Wholly Foreign-Owned Enterprise), so do not expect to have completed in less than 8 months in the best case.
Many other complications can still occur, especially those related to obtaining working visas or residence permits for your representatives. Chinese migration policy get more difficult every year, and the current government has decided to reduce the number of entries in its territory, in order to encourage local youth on the labour market. Administrative procedures for obtaining visas for this purpose have been made much more complex, and Chinese immigration law is constantly changing, undergoing significant changes about every three months.

What are PEO Services?

The concept of PEO Services is simple. It is a legal and regulated practice of turning fees charged to the client company through management fees into salary. Therefore, the client company pays the fees of the consultant to the Professional Employment Organization (PEO, the organization that provides the payroll outsourcing services). It is then responsible to pay back wages to the consultant which represent the remuneration of its business, after deducting all costs of management and employee contributions.

Payroll outsourcing is organized into three different parts, between a consultant (the person who is paid), a client company (the company that wants to set up in China), and a company called PEO (here INS Global Consulting). The company and the PEO are bound by a contract of service providing while the PEO and the consultant are bound by a contract of employment. This PEO deducts, management fees and benefits paid to corporate organizations from the tax-free customer billing. The net salary is about 50% of the tax-free fees charged.

Who are PEO services for?

Payroll Outsourcing applies to all unregulated job cores of services provision and intellectual benefits; communication jobs also (journalist, editor, graphic designer, art director, …) as well as consultancy or expertise ones (IT, marketing, human resources, engineering, …)

sharing in business keys

The services of a PEO

Those services are generally divided into four broad categories:

- Administrative and legal Outsourcing: The management of all the steps of obtaining a working visa, salary payments to consultants, the realization of tax declaration, or the choice of medical insurance.

- Structural Outsourcing: The provision of business premises, places of work.

- Provision of expertise: A PEO generally has a network of relationship and therefore quite a good knowledge of the socio-economic context of the country, it can therefore provide its clients with an individualized assistance in the launch of its business. This can result in an appropriate coaching that will lead to the creation of a strategic development plan.

- Tax Expertise: Its knowledge of tax deadlines and procedures enable it to optimize tax payments from its partners.

The advantages of the concept of Payroll Outsourcing

• Gives the client company the flexibility it needs to identify opportunities for the industry, negotiate and operate freely and without time constraints to its customers.
• Provides the consultant with an office and a ready-to-use organizational framework.
• Legal Support.
• Invoices and payroll issuance.

INS Global Consulting provides the salary payment for your consultant in RMB, USD or EUR – we will sign a service contract and your consultant will be hired through us. Every 15th month we will send you an invoice where his/her salary will be included and after reception it will be paid to him/her.

For any other information feel free to contact us by mail.

See also:

-          What are PEO Services?

The boom of food imports in China

China’s economy is growing, with the country being the second largest economy and the world’s top importer and exporter. The economy is very diverse and is dominated by different food sectors but, the agro products in China are in deficit and are worsening, which leads to an increase of imports. At the same time, China is also in deficit in milk and dairy products, and the Chinese consume more and more dairy products every day. The food market of import products in China is growing quickly and having a sales representative under an umbrella company looks to be an effective way to approach the Chinese food market.

With a lot of issues and scandals under the local food market in China, more and more local Chinese enjoy imported Western products to preserve the health of their families as food safety is becoming more and more important. It is estimated that China will be the biggest importer in the food sector by 2015-2020.

food organic Shanghai

Exporting products on the Chinese market

There are a lot of solutions to consider in exporting your food products in China, with Chinese Laws and language very different from other countries. Some of them are:

Participating in fairs, but sell from the origin country

Participating in fairs in China offers the Chinese importers and distributors to see your product, be curious about it, to have a basis on where to start, and possibly, to sign contracts. During these fairs, the importer and distributors choose new products to market in China. There are quite a lot of food fairs regularly going through Shanghai, one of them is Bakery Shanghai.

This solution helps the exporter sell the products from his/her origin country without having the problem of the exporting laws and regulation from the Chinese government. But, the drawback of this solution is the exporter loses the brand control of his products, making it the importer or distributor’s goods. He will have no control whatsoever in the products after being exported in China.

Ebusiness4

Creating a joint-venture

A joint venture is when two companies join together to form an international corporation. The foreign company will go and partner with a Chinese company so that the Chinese company would be the one in full charge with everything that goes in China. With this, it is necessary to find a local Chinese company who will partner with your company and you’ll have to take care of the administrative duties in the joining of the two companies together.

Launching a WFOE or wholly foreign owned company

Launching your company doesn’t need a Chinese local, but should have a very big capital as this can be very expensive and time consuming especially with the administrative procedures and in terms of obtaining certain licenses to construct the company.

To have a Chinese partner

This can be an option instead of a whole company as a partner. It has basically the same procedures with creating a joint-venture in a Chinese company, but this is very risky as you have to make sure the person you choose is trustworthy and can do the job well. Many disagreements and cultural differences can occur with this option.

umbrella-china

To have a salesperson under an umbrella company in China

Hiring and positioning a salesperson to prospect on the Chinese market can be attainable by going through the services of an umbrella company. The umbrella company will take care of all the basic things needed to launch a business on the Chinese market, like the administrative, salary, and human resources procedures.

The foreign company will be linked to the umbrella company under a service provision contract while the umbrella company is linked to the sales representative with a working contract. The sales representative will work for the foreign company on the Chinese market, basically, in China.

The umbrella company will be in charge of the administrative, visa, and different other procedures in hiring of the foreign company’s sales representative, while the sales representative does his/her core job. In approaching the Chinese market, he/she will do everything that is needed to know and understand the rules and laws and health regulations in China in order to import his products. Being in China gives him a greater chance to more about the competition, the evolution of the market, and to find more clients.

INS Global Consulting

INS Global Consulting is an umbrella company with PEO services offered that can serve as the best alternative in investing in the Chinese food industry.

If you want to know more about the different PEO services offered by INS Global Consulting and how it can make importing in the Chinese food industry easier for your company, go to our website  or contact INS Global Consulting.

For further readings on the imported food market in China, click here.

Source: INS Global Consulting

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